ECMT1020 Final: ECMT1020 Final Exam Study Guide

1. You are told that the economy is producing efficiently and has chosen to produce and consume 6 units of X and 16 units of Y. At this point on the production possibilities frontier, you can use calculus to obtain the opportunity cost of X as: A) 2 B) 1/2 C) 1 D) 3/2 E) 2/3 F)3 G) 1/3 H) 4 1) 1/4 J) 8/3 K) 3/8 L) 5/2 M) 2/5 N) 4/3 0) 3/4 P) 6 Q) 1/6 R) 8 S) 1/8 T) none of the above

2. Now you are told that the economy is producing efficiently and has chosen to produce and consume 8 units of X. At this point on the production possibilities frontier, you can use calculus to obtain the opportunity cost of Y as: A) 2 B) 1/2 C) D) 3/2 E) 2/3 F) 3 G) 1/3 H) 4 1) 1/4 J) 8/3 K) 3/8 L) 5/2 M) 2/5 N) 4/3 0) 3/4 P) 6 Q) 1/6 R) 8 S) 1/8 T) none of the above

12 The table below shows the quantities of toffee bars and bags of cashews that a consumer could consume over a l-week period. Toffee (bars) Cashews (bags) Total Total Units Marginal Utility Utility Marginal Utility Utility 10 10 28 18 10 22 35 23 29 26 5 2 6 0 37 17 0 27 | 0 | 27 TABLE 6-1 18) Refer to Table 6-1. If the prices of toffee bars and bags of cashews are both $1 and this consumer has $7 per week to spend on these two snacks, how many of each will he/she purchase to maximize utility? A) 2 toffee bars and 5 bags of cashews B) 3 toffee bars and 4 bags of cashews C) 4 toffee bars and 3 bags of cashews D) 5 toffee bars and 2 bags of cashews E) 6 toffee bars and 1 bag of cashews